* BP’s handling of the Deepwater Horizon oil spill is a classic case of a company in dire need of a managed reputation. Yeah, it tried buying adwords on Google after the incident, but it was too little, too late. By then, BP’s name had already become a punchline, and it will probably always be synonymous with a disastrous gusher, linked forever like Exxon and Valdez.
* Remember United Breaks Guitars, the video I showed you last week? That rep management slip-up reportedly cost it $185 million. Had it managed the crisis better, it might have lost far less.
* Last month, a video of GoDaddy CEO Bob Parsons shooting an elephant in Zimbabwe made the rounds online. You’d think someone as Internet-savvy as Parsons would try to avert the damage with a sophisticated rep management campaign. Instead, he suggested his critics were clueless, even after calls for a boycott against the domain name registration company. “GoDaddy lost customers after that,” says Kent Lewis, president of Anvil Media. “I was on an email list of Internet pundits, where the major discussion was who offered the best alternative to GoDaddy for hosting. They all left.”

Saving money and face are great reasons to manage your reputation, of course. But experts say that’s not good enough.

Customers Demand It

Do it for your customers.

“Reputation management, and reputation management firms, are largely tasked with disaster cleanup,” says Scott McAndrew of the digital marketing firm Terralever. “They come in when things are bad, and, in many cases, use tactics that hide what’s bad, and try to court what’s good.”

But rep management like that is the rough equivalent of treating the symptom without looking for a cure. It’s crisis PR plus.

“Even the best reputation management can’t hide a business that is truly lousy in customer service and their are simply too many other choices out there then to buy from a business that does not value you,” says Marc Karasu, founder of the customer-service site MeasuredUp.

Reputation management can drive better customer service, though.

Instead of rebranding themselves whenever there’s a reputation problem, companies should try to use the tools of rep management to determine where customer service problems are — and fix them.

Yesterday, I covered one company’s bold plan to embrace the bad reviews it gets. What if negative reviews could be incorporated into a more comprehensive reputation management program?